Rupee weakness likely to pressure RBI on 50-bps rate hike: Analysts

After strengthening sharply against the dollar earlier in the day, the rupee surrendered most gains by the end of trade as importers relentlessly purchased the greenback fearing fresh strength in the US currency, dealers said.

Analysts feel the recent sharp depreciation in the rupee — which lost 2.3 per cent since last week – has exerted pressure on the Reserve Bank of India (RBI) to raise interest rates by a greater quantum than it may have otherwise. The RBI’s Monetary Policy Committee will announce its next statement on Friday.

While the RBI has made it clear of late that its